TELSTRA BOSS: 'Almost Everything Needs To Change'

Telstra boss David Thodey (Photo: Getty Images)

Almost everything at Australian telco Telstra needs to change if the company is going to survive in what is becoming a very different marketplace.

Speaking at the Australian Institute of Company Directors event in Sydney, Telstra CEO David Thodey said the progression of technology and a rise in the level of connectivity is driving Telstra to transition into a new type of telco, meaning almost everything in the company needs an overhaul.

“For Telstra we know if we don’t reinvent ourselves, if we don’t continue to innovate in some way that our customers will tell us and they’ll leave us and when they leave us we don’t have a business,” he said.

Thodey said he’s challenged daily by the speed at which tech is changing, adding Telstra’s legacy needs an overhaul if it’s going to grow in the future.

“I think about reinventing everything in Telstra,” he said. “The scale and speed is just going to get faster, not slower.”

Traditionally telcos made their revenues on fixed lines and phone calls but with the birth of mobile tech, and services like Skype, Viber and Whatsapp that all started to change.

All of a sudden people weren’t making calls or signing up for land lines, they were communicating over the web using data and that was eating into the profits and future plans of telcos.

“We have to reinvent ourselves. We have to change nearly everything in the company. As much as it’s a wonderful legacy you have to keep changing,” Thodey said.

“Australia and companies like Telstra have got to be more innovative.”

Part of the overhaul will be embracing software and digitisation of services and focusing on the internet, enterprise and mobility businesses.

However, fixed infrastructure will still be a big focus for the company in the future, Thodey said.

Telstra has been actively closing deals this year as it forges ahead with its transition.

This week its video streaming subsidiary Ooyala, which Telstra acquired in August for $US270 million, bought video advertising company Videoplaza for an undisclosed amount.

It could be the first of multiple takeovers for Ooyala as it establishes itself as a global TV and video company.

“We need to find ways to do things different,” Thodey said. “Technology is the enabler but we have to make the value.”

“Telstra has only just started on its change journey,” he said, adding in five years time it will be a completely different company.

Thodey said startups are innovating fast and while that’s great, it’s something which cannot just be left to the little companies – big organisations need to innovate as well.

“Often we see the innovation coming from startups,” he said.

“It’s not just for startups its for every corporation.

“We all need to grasp hold of this technology and apply it to ourselves,” he said adding it will change business models.

But getting large corporations to reinvent themselves is very difficult – especially for companies like Telstra which has at least about nine levels of management.

“The curse of all large corporations is complexity and we are masters of complexity,” he said, adding Telstra needs to simplify.

But the process of simplifying is something which Thodey admits isn’t going to be simple.

“It’s hard to disrupt yourself,” he said.

“For a company like ours it’s an aspiration because it doesn’t come easy.”

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